ADB urges developing govts to engage private sector

Sunday, 12 February 2012

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Digital Inclusion

By Robin Hicks | 4 May 2010

The Asian Development Bank has called on governments in developing countries to create more opportunities for the private sector to “turn the digital divide into a digital opportunity” to aid the fight against poverty.

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In an interview with FutureGov at ADB’s headquarters in Manila, the bank’s ICT Economist, Hyunjung Lee, said that public sector funding alone is not sufficient to bridge the digital divide in developing Asia.

“Governments policymakers can address the digital divide directly. They can also embrace the private sector to realise their own market potential,” she said. “It is important to change our perspective of the poor from recipients of aid to entrepreneurs and consumers. The aggregate purchasing power of the bottom end of the pyramid is a significant opportunity for private companies willing to serve these markets.”

“By sharing cost and risk with the private sector, governments can narrow the digital divide.”

However, Lee pointed out that knowledge sharing and capacity building were essential to make public-private partnerships work. “One of the key lessons learned is that ICT should as treated as a business function, not a technology project implemented in a silo. If developing countries are not clear on what they need technology to do for them, and rely too heavily on vendors, they will run into trouble.”

Collaboration with other governments is another effective way for Asia’s developing countries to catch up, although a gradual, “evolutionary” approach to adopting other countries’ systems is necessary, Lee added.

“I do not think it is unhealthy for the governments of Singapore or South Korea to share their e-government models and experiences. But we need to treat as separate a country’s experience as a maturing e-government from the e-government solutions and systems it used on its journey.”

“For the governments of developing countries to be realistic about the solutions they need, they should build their own capacity in designing and implementing e-government initiatives to ensure they can be customised to fit their own processes and governance structures.”

Sharing “backbone” infrastructure is another way to close the digital divide in developing countries, she noted, pointing to the ADB-assisted South Asia Subregional Economic Cooperation (SASEC) Information Highway Project as an example of ICT-enabled poverty reduction.

The project aims to deliver “modern affordable and reliable broadband information, communication, and knowledge services within and across borders to universities and businesses and to rural communities” in Bangladesh, Bhutan, India, and Nepal, according to an ADB briefing document.

A US$24 million investment package for the SASEC Information Highway Project was approved by the ADB in November 2007, which provided a grant, loan, and technical assistance.

“As Nepal and Bhutan are landlocked, they do not have access to major sea cables and must rely on satellites and on other countries’ backbone infrastructure. The Information Highway provides a solution by facilitating a more efficient and competitive infrastructure service market for India and Bangladesh, and more reliable and affordable prices for Nepal and Bhutan,” Lee said.

However, Lee does not expect the project to get results quickly. “New technology requires us to acquire new skills,” she noted. “Technology produces hope and hype. There are difficulties and challenges that requires us to change the way we live, communicate and work.”